Binance Asks Prime Brokers to Enhance KYC to Block U.S. Nationals: Bloomberg
Binance is requiring its prime brokers to conduct enhanced Know Your Customer (KYC) checks on clients to ensure they are not serving U.S. nationals. This comes after Binance admitted to violating sanctions and money-transmitting laws, settling the case for $4.3 billion. Prime brokers, including FalconX and Hidden Road, are now required to gather additional client information such as office addresses and employee locations. Binance's rapid growth was largely driven by U.S. customers, a practice deemed illegal by U.S. authorities due to the exchange's lack of registration as a U.S. business. Despite being aware of the risks, former Binance CEO Changpeng "CZ” Zhao and other officials encouraged high-value U.S. clients to hide their U.S. connections through methods like using VPNs and an API to access the main exchange.
